Dow’s Reshuffle Dims Profit Growth
Each Monday, MoneyBeat publishes a short column in the WSJ print edition highlighting a statistic getting traction in the markets. This week’s “Big Number” is 5%, the average estimated profit growth for the new Dow over the next five quarters.
The Dow Jones Industrial Average starts the week with three new stocks. And a much dimmer growth outlook.
The czars of the Dow added Nike Inc.NKE -0.84%, Visa Inc.V -0.68% and Goldman Sachs Group Inc. and dropped Alcoa Inc.AA +0.18%, Bank of America Corp.BAC -1.80% and Hewlett-Packard Co. Monday’s trade marks the first official day of the new Dow.
One side effect: John Butters, senior earnings analyst at FactSet, says the revamped Dow prompted a mark down in average earnings growth expectations for the 30-stock average. Mr. Butters says the new Dow is predicted to have average growth of about 5.0% over the next five quarters, down from 6.9% as of Friday....MORE